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Structural Adjustment In Zimbabwe

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Category: Social Issues

Autor: anton 20 December 2010

Words: 2484 | Pages: 10

After gaining independence in 1980, Zimbabwe’s new leader, Robert Mugabe and his ZANU-PF government are said to have inherited nearly 700 million dollars in debt from the former Rhodesian Regime. This set the stage for what can be referred to as the “uneven development,“ as it is argued that Robert Mugabe did not have any other option, than to adopt the neoliberal policies of the World Bank and International Monetary Fund in an attempt to free the Zimbabwean economy (Bond 93). In 1991, Zimbabwe introduced what is known as the Economic Structural Adjustment (ESAP), to stimulate economic growth and reduce poverty. The government would “de-emphasise its expenditure on social services and emphasise investment in the material production sectors such as agriculture, mining and manufacturing”(Gibbons 10). To begin economic restructuring, the Zimbabwean government received financial assistance from the World Bank (WB) and the International Monetary Fund (IMF). To qualify for assistance, the government had to meet certain requirements in the areas of “budget deficit reduction, fiscal and monetary policy reforms, trade liberalization, public enterprise reforms, deregulation of investment, and labour and price controls”(Bond 90). The people of Zimbabwe were promised that their deteriorating economy would be transformed into a strong self-sustaining one. The majority of the people were poor anyway, and did not realize to what extent they would have to sacrifice with the implementation of Structural Adjustment Programs, said to benefit their economy and increase their standard of living (Riphenburg 1). In Zimbabwe, the Economic Structural Adjustment Program(ESAP) has been detrimental to human development and the welfare of the Zimbabwean people, especially on the areas of employment and wages, health services, education, and food security.

Employment and wages has been severely impacted by the implementation of the ESAP and has been a leading factor in the hindering of Zimbabwe’s human development. The main objective of Zimbabwe's ESAP, was to stimulate economic growth, attract foreign investment expand employment and reduce government expenditure. The achievement of this goal was to be brought about by “trade liberalization, devaluation, privatization, huge cuts in government spending and social services like education and health and the deregulation of working conditions“(Marquette 1141). Trade liberalization policies are the ESAP measures that have had an immediate and direct impact on employment and labour relations. It entails the reduction of trade barriers such as taxes, and tariffs on goods and services traded between or within countries (Carmody 41). Because of this trade liberalisation under the Economic Structural Adjustment Program implemented in 1991, interest rates in early 1992 increased by 35 to 40 percent, and also resulted in the devaluation of the Zimbabwe dollar by over 40 per cent (Gibbon 44).

Wage “flexibility” was also introduced, and because of the continued relaxation of government regulation of labour marketed under ESAP, control was placed into the hands of the employers. Up until the late 1980s government regulation included strict control of hiring and firing, and minimum and maximum wage determination. Beginning in the late 1980s and into the 1990s with ESAP the power was left in the hands of the employer to control wages, laying off workers, extending working hours, and “moving workers into lower paying jobs to cut costs”(Marquette 1145). Some restrictions on worker lay-offs were abolished, and competition in the area of labour was promoted. Furthermore, with the reduction or elimination of subsidies under structural adjustment, private companies have been forced to reduce costs in order to remain competitive. “Deregulation has allowed them to make increased use of temporary, part-time contract workers who do not receive benefits and have no job security”(Bond 106). These changes have increased unemployment and decreased real wages. The average rate of employment growth during the ESAP period is one half the growth rate of the labour force, meaning that new jobs are not being created fast enough in relation to the amount of new entrants in the labour market(Marquette 1145). Those workers who do find full-time jobs are no longer guaranteed a wage, and the effects of this reduced income have been made even worse by rising prices. “Inflation rose from 15.5 percent in 1990, when the first ESAP was implemented, to 42.1 percent in 1992; by August 1999 it had reached 68.8 percent” (Bond, Saunders 42). The collapse of wages has meant that many workers live far below the poverty line.

Due to the removal of labour regulations and the increase in part-time employment, working conditions have also declined. There is no longer a “functional grievance system for workers' complaints“(Maclean). Women experiencing sexual harassment are far less likely to report an incident for fear of “retrenchment“, as employers now can easily fire people. The decline in the power and effectiveness of trade unions, has only contributed and worsened the problems faced by working people (Maclean).

Changes in health services also reflect the influence of the IMF’s Structural Adjustment Program, and the severe drought that occurred in 1991-1992. Prior to the implementation of ESAP and just after Zimbabwe gained independence in 1980, the government introduced a program which offered free medical care to all citizens who’s monthly incomes were less than Z$150 and to those who were unemployed. This was implemented with the long term goal of providing free health care for all by the year 2000 (Gibbon 217). Throughout the 1980s the Z$150 policy was not reviewed even though there had been wage increases due to inflation. “In 1982 about 46 percent of formal-sector employees were eligible for free health care, whereas by 1992 less than 2 percent qualified”(Riphenburg 7). The free health care qualification was then raised to Z$400 in 1992 to account for more people, however, because of conditionalities attached to the Economic Structural Adjustment Program implemented in 1991, government spending on health care was reduced significantly, which reversed the promising outlook of health care service and crippled the huge advances made in the previous decade. Specifically, spending was cut from “common drugs, extension and preventative health services, specialist facilities and treatment, and other components of quality health care delivery“(Gibbons 218). At the same time, the government's enforcement of a user fees system made it even more difficult to access health care, especially for the poor social groups who were, typically, those most in need of health services. This user fee system requires advance payment, particularly for maternity care, which caused a significant drop in the number of people using modern health care (Riphenburg 8).

Because of deteriorating incomes, many women cannot afford to pay the up-front Maternity fees which are even higher if a woman fails to pre-book a bed. This unfortunately resulted in an increase in maternal mortalities from “251 deaths per 100 000 births in 1991 to 335 deaths per 100 000 in 1992” (Riphenburg 8). The introduction of drug charges and the devaluation of the Zimbabwean dollar at the same time made the price of drugs very high. In 1992 doctors and nurses began referring to what they called, "ESAP deaths," described as deaths caused by the inability of patients to pay for the minimal length of time in the hospital, or for prescription medicine (Marquette 1144).

Zimbabwe’s gains in health in the early 1980s have been destroyed by the reduction in spending on health services under the ESAP, and has turned into a situation where those most in need and least able to pay have been marginalised from quality health care.

Much like health services, education was also a top priority for Zimbabwe in the 1980s, and the Mugabe government was committed to lowering costs and improving access (Richardson 188). Primary school was provided free of charge to all citizens. “Between 1980 and 1984, 1000 primary schools, and 900 secondary schools were built, mainly in rural areas”(Richardson 108). Thirty thousand teachers were hired in three years, doubling the existing amount. “Primary enrolment increased from 820 000 in 1979 to 1.2 million in 1980. By 1989 it had leapt to 2.2 million.”(Carmody 38). However as part of the ESAP implemented in 1991, severe cuts in the education spending were made.

In 1991-1992 education spending fell by 8 percent and then by another 11 percent in 1992-1993. Fees were then introduced for primary and secondary schools. The cost of attending primary schools were Z$12 per year in rural areas, Z$60 in high-density urban areas, and Z$210 in low-density urban areas. The fees for Secondary schools are set at Z$220 and Z$250. This has resulted in further separation in gender equality as well in this already existing patriarchal country (Riphenburg 6-7).

Because of deteriorating incomes due to wages, inflation, and devaluation of the dollar, Zimbabwe families were faced with the choice of who to send to school, and parents would rather educate their sons than their daughters. For Zimbabwean culture, it is seen as more beneficial to the family to educate the male children, since the female children will marry and leave to live with the husbands family. Also, female labour in the household is valued more than males, and when rising school fees force parents to take their children out of school, it is the girls that are sacrificed first (Brydon 123). The diminishing government spending on education and the implementation of school fees has left hundreds of thousand of children without an education, and despite the continuously growing population, enrolment levels of children into urban primary schools has fallen drastically since the implementation of the ESAP in 1991.

The effects of ESAP and drought, were perhaps most complex in the area of food security during the 1990s. In addition to the direct effects that ESAP and drought had on food prices, the “1991-1992 drought effected the timing and implementation of ESAP itself“(Marquette 1145). Some of the more prominent impacts of the drought on food security were widespread crop failure, declines in agricultural production, and rising food prices. Because of these conditions, the planned removal of subsidies on food under ESAP was postponed to protect the people from additional price increases (Richardson 75-78). The government implemented drought relief programs including “direct food relief, food for work programs, child supplementary feeding programs, farm debt rescheduling, seed distribution, livestock purchase and herd-rebuilding schemes, and tillage services” (Marquette 1145). The funding for this relief was provided from donors, loans, and from pulling funds from other sectors such as health and education. According to Marquette, “three-quarters of households in rural areas applied for drought relief in 1993” (1145). Effectiveness of these drought-relief programs allowed for the removal of food subsidies under ESAP in 1993 that had been postponed the previous two years. At this time the government also deregulated the production costs of maize, otherwise known as corn in the west. They did this in order to encourage farmers to switch from their traditional crops to the export valued cash crop of maize (Maclean).

As a result many small scale millers began operation and availability of maize increased which in turn remained stable despite the removal of subsidies. However, the price of many other important goods such as bread, sugar, increased dramatically due to the subsidy removal in 1993, and rose by “40 to 50 percent”(Marquette 1145). High inflation occurred as well as a direct result of low agricultural production due to the drought. The combination of rising food prices for most foods, inflation, and falling wages as well as the IMF/WB influence on farmers to switch to cash crops, has had adverse impacts on food security among the Zimbabwean people(Gibbons 20) .

In Zimbabwe, the Economic Structural Adjustment Program has been harsh. Investment and economic growth have remained stagnant, and the living conditions of the vulnerable groups have deteriorated significantly. It has had adverse effects on the Zimbabwe health care system, education system, detrimental impacts on labour and wages, as well as food security. The IMF and World Bank have crippled the internal market, peasant producers and local industry and the only institutions that benefited are the external market and commercial agriculture sectors (Carmody 37).

The basic error of the ESAP is the priority given to economic growth, money, and market, over people and their basic needs; something that has been shown to be characteristic of neoliberal globalization. “It is a monetarist program rather than a long-term human development program”(Riphenburg 11). The welfare of the people of Zimbabwe is secondary and the gap between the rich and the poor is widening because of IMF’s neoliberal policies. “In fact, the ESAP is the Bank’s solution to the debt crisis by changing developing economies into export economies and guaranteeing the continual flow of debt service payments”(Riphenburg 12).

Zimbabwe is a prime example of the kind of globalisation that has occurred in many other countries and continents in the past 2 decades. The industrialized west has severely violated the sovereignty of developing nations by exercising their power in an undemocratic way through the implementation of Structural Adjustment Program claiming to benefit the poor. In reality the neoliberal policies implemented have only benefited those in the west and a select few in the borrowing countries, and has further marginalised the poor citizens and has been catastrophic to different areas previously discussed. It is important to keep in mind, that this has all been done in the name of poverty reduction, economic growth, and good governance.

Bibliography

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